A good faith agreement template is a legal contract that binds two parties together to carry out any sort of trade or business related relationship on good terms. It basically means that both parties are legally bound to be fair and reasonable with each other. The purpose of this agreement is to avoid the violation of rights of either party, along with future disputes that could lead to termination of the business deal or any type of extreme possibility which could negatively affect any or all of the parties. Hence, it is an efficient way of carrying out smooth and easy-going business deals with other companies. It also results in a long-lasting partnership, which is a big advantage to both parties. This agreement also determines how the extreme situations mentioned earlier will be handled in an ethical way. It lists some terms and conditions which must be followed in case of any predicament. This way, the case is handled smoothly by following the rules mentioned in this agreement.
Crucial Segments of a Good Faith Agreement
The good faith agreement template is composed by either of the parties and the other party requests their lawyer to review the terms. The presence of a lawyer is necessary to avoid any unfair dealings or conditions that only favor one of the parties. They also act as legal witnesses to the agreement being held between both parties. The good faith agreement is a short and concise document which includes basic introductions and details about the terms. For better understanding, the steps to be followed while making one are mentioned below:
I. The date on which the agreement will be made effective. This is the date from which both parties will be legally tied together.
II. Basis introduction to the parties, their name, contact information, what is their status in the contract (the buyer or seller), and address.
III. The purpose of the agreement is being made. This part usually explains that the agreement is being carried out to avoid future disputes and for both the parties to carry the contract smoothly and fairly.
IV. Terms and conditions of the contract. This step is the most important and explains certain terms and conditions that must be followed in specific situations in the future.
V. The time period till which the agreement will stay valid. After this time period, both parties have the freedom to act on their own without having to follow the guidelines of the agreement.
VI. Authorization of the agreement must also be clearly written out.
VII. This agreement should also include that the violation of any of the above stated terms will be considered a violation of the law and the said criminal will have to face charges.
VIII. Lastly, both the parties are required to sign the agreement in the presence of their respective lawyers and initiate the agreement.
Both the parties are given their individual copies of the agreement which can later be used in case of any legal problems.
Template for Good Faith Agreement
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